1. What is electric utility deregulation?

Deregulation of electric utilities means many things. The most important are:

- The Public Utility Commission of Texas no longer controls the amount you are charged for electricity.

- Residential consumers can choose an electric provider like they choose telephone service.

- Customer protection standards are set by the electric company.

- And, the provider of last resort (POLR), the only company that must serve everyone has the highest electricity prices.

2. Why is Texas deregulating the electric utility industry?

The goal of the electric utility deregulation law, Senate Bill 7, passed by the Texas Legislature in 1999 is to lower electricity prices and provide better service.

In California, there have been no price savings for residential customers under deregulation. In Pennsylvania, REPS are pulling out of the residential market, rates are going up and many consumers are returning to regulated rates. However, in other states and other countries the Texas deregulation law is seen as a model that will avoid all the problems experienced elsewhere.

3. Is my electricity currently regulated or deregulated?

Only the utilities participating in the pilot project are scheduled to be deregulated on January 1, 2002. These are TXU Electric, Reliant HL&P, Entergy Gulf States, Central Power & Light, West Texas Utilities, Southwestern Electric Power Company, and Texas New Mexico Power Company.

4.What is the difference between the retail marketing company and the wires company?

Only the retail marketing company, called the retail electric provider or REP, can sell electricity. The wires company will continue to operate and maintain the transmission and distribution lines that transport electricity to your home.

5. What will happen to my rates when retail competition begins on January 1, 2002?

Under the Texas deregulation law, TXU must sell electricity at a regulated price until 2007 or until 40 percent of residential customers change to a different REP. The Public Utility Commission of Texas (PUC) will set the regulated rate called the "Price to Beat or PTB."

Under the law, the "Price to Beat or PTB" is supposed to be 6 percent lower than the rates paid by consumers on September 1, 1999. It is important to note, however, that the PTB process established by the PUC allows the rate to be adjusted for fuel costs.

6. Will there be a company that is required to serve any residential customer or could consumers be left with no one to sell them electricity in the deregulated market?

Under the law, there will always be a "provider of last resort or POLR." The POLR is a company that will be obligated to sell electricity to any consumer that can meet its credit requirements. The POLR is the only provider with the authority to disconnect a consumer for nonpayment.

7. How will POLR rates compare with the rates residential consumers are paying today?

The POLR will often require advance payment and charge fees for routine services like calling the customer service center. POLR rates are running as much as 30 to 50 percent higher than the rates charged today. Under POLR contracts signed by the PUC a consumer could have to pay a $300 security deposit within 10 days or be disconnected.

8. What will happen if I can't pay my bill on time?

The procedures for disconnection of electric service will be different than they are today. REPs will have no obligation to serve and no authority to disconnect service for nonpayment. When an electric bill is not paid, the REP will send a notice terminating the customer's service contract. Upon termination the customer will be transferred to the Provider of Last Resort (POLR) where rates will be higher and fees will be charged for disconnection and reconnection.

9. Will Texas have the same problems with deregulation as California?

Texas could have price spiking and power shortage problems like those experienced in California. The Texas restructuring law is different from the California law in many ways. Some people believe that the Texas law will protect consumers from the price spikes and black outs experienced in California.

However, despite differences in the Texas law, price spikes are occurring regularly in the pilot project being conducted by the PUC and the Electric Reliability Council of Texas (ERCOT). Like California, Texas has no standard for maintaining capacity reserve margins and many in the industry would like Texas to continue to have no standard.

The price and availability of power in Texas is also impacted by the ability of ERCOT to transport power freely to all areas of the state. Many areas of the state have constraints on the transmission system that limits the ability to transport power.

10. Are there any hidden fees with New Power, like surcharges and connect fees?

No. New Power, in computer lingo, is a WYSIWYG (What You See is What You Get) Retail Electric Provider. Meaning, we put all the facts forth up front, and give you, the consumer the opportunity to make the most logical choice for your utility needs.

There is absolutely no cost to sign up, whether you are transferring from your current regulated service provider, or you are a brand new electrical customer. New Power understands that situations occur that are beyond your control, and therefore charge no disconnect fees when you move to a new area. However, if you are not moving and still choose to switch services prior to the end of your annual contract, there is a very small $30 charge.

11. Is it true that New Power users get FREE electricity?

Yes. New Power is currently offering new customers FREE electricity during the entire month of December.

If you like Christmas lights, but always held back due to high electric bills, why not let New Power light up your holiday?!

NOTE:
If you have any additional questions that have not been addressed in this FAQ, please drop an e-mail and you'll get an answer within 24 hours.

Smart Energy Group
5015 Wind Song Drive
Killeen, TX 76542
smartenergygroup-jb@hot.rr.com
(254) 702-2319